AG Gansler: ISTA Pharmaceuticals Pays $33.5M to Settle Charges of Kickbacks to Doctors

Postoperative cataract drug was fraudulently marketed for unapproved uses

BALTIMORE (July 19, 2013)—Attorney General Douglas F. Gansler announced today that Maryland, joined by 44 other states and the federal government, reach an agreement with ISTA Pharmaceuticals, Inc. (ISTA) to settle allegations that ISTA marketed the drug Xibrom® for uses that were not approved by the U.S. Food and Drug Administration (FDA) and paid illegal inducements to doctors to write prescriptions for Xibrom®.

“The law says you can’t market drugs for unapproved uses and in any case, you can’t pay kickbacks to doctors,” said Attorney General Gansler. “While the damage done in Maryland – both in health and financial terms – appears to be limited, one patient harmed or one dollar stolen from taxpayers is one too many.”

ISTA paid $15,000,000 to the states and federal government to compensate Medicaid, Medicare, and other federal health care programs for harm suffered as a result of its conduct. Additionally, ISTA paid an estimated $18.5 million in fines and forfeitures to settle criminal charges. The Maryland Medicaid Program will receive $9,796.51 which includes both the State and federal share of the Program’s portion of the damages.

The FDA approved Xibrom® to be used for up to 14 days following cataract surgery. ISTA marketed the drug for a wider range of uses including treatment and prevention of cystoid macular edema, treatment of glaucoma and inflammation other than postoperative inflammation, and treatment of pain and inflammation associated with non-cataract eye surgery.

ISTA also provided illegal compensation to certain ophthalmologists and optometrists to induce them to prescribe Xibrom®, in violation of the Federal Anti-Kickback Statute. ISTA pleaded guilty to conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration, paying approximately $18.5 million in addition to the $15 million civil settlement.

This settlement is based on whistleblower actions filed in the United States District Court for the Western District of New York under state and federal false claims statutes. A team from the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with ISTA on behalf of the settling states. Team members included representatives from the Offices of the Attorneys General for the states of Maryland, California, Colorado, New York, and North Carolina, as well as the District of Columbia.

Attorney General Gansler thanked Medicaid Fraud Control Unit Deputy Director Shelly Marie Martin and Chief Auditor Ruth Jarrell for their work on this case.

Source: Office of Attorney General Douglas F. Gansler

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